Jim Balsillie Data is not the new oil – its the new

I would like to start by acknowledging the work of the Canadian members of this Committee. Over the past 3 years, Mr. Zimmer, Mr. Angus and Mr. Erskine-Smith spearheaded a bipartisan effort to deal with data governance. I’m inspired by the seriousness and integrity they bring to this task.The perspective that I bring today is that of a capitalist and global tech entrepreneur for 30 years and counting. I am the retired Chairman and co-CEO of Research In Motion, a Canadian technology company we scaled from an idea to $20 billion in sales. Innovation Nation: What Canadian companies need to thrive in the cutthroat global ideas economy Remember the internet of the ’90s? That’s what Canada’s outdated data protection laws were designed to handle Canada’s digital industry needs to set global standards — we all depend on it While most are familiar with the iconic BlackBerry smartphone, ours was actually a platform business that connected tens of millions of users to thousands of consumer and enterprise applications, via some 600 cellular carriers, in over 150 countries. We understood how to leverage Metcalfe’s law of network effects to create a category-defining company. So I’m deeply familiar with multi-sided platform business model strategies as well as navigating the interface between business and public policy.I’ll start with several observations about the nature, scale and breadth of our collective challenge here.The online advertisement-driven business model subverts choice and represents a foundational threat to markets, election integrity, and democracy itself Disinformation and fake news are just two of the many negative outcomes from unregulated attention-based business models. They cannot be addressed in isolation. They have to be tackled horizontally, as part of an integrated whole. To agonize over social media’s role in proliferation of online hate, conspiracy theories, politically motivated misinformation and harassment is to miss the root and scale of the problem.Second, social media’s toxicity is not a bug — it’s a feature. Technology works exactly as designed. Technology products, services and networks are not built in a vacuum. Usage patterns drive product development decisions. Behavioral scientists involved with today’s platforms helped design user experiences that capitalize on negative reactions because they produce far more engagement than positive reactions.Third, among the many valuable insights provided by whistleblowers inside the tech industry is this quote: “the dynamics of the attention economy are structurally set up to undermine the human will.” Democracy and markets work when people can make choices aligned with their interests. The online advertisement-driven business model subverts choice and represents a foundational threat to markets, election integrity and democracy itself.Fourth, technology gets its power through control of data. Data at the micro-personal level gives technology unprecedented power to influence. Data is not the new oil – it’s the new plutonium. Amazingly powerful, dangerous when it spreads, difficult to clean up and with serious consequences when improperly used. Data deployed through next generation 5G networks is transforming passive infrastructure into veritable digital nervous systems.Our current domestic and global institutions, rules, and regulatory frameworks are not designed to deal with any of these emerging challenges. Because cyberspace knows no natural borders, the digital transformation’s effects cannot be hermetically sealed within national boundaries. International coordination is critical. With these observations in mind, here are my six recommendations for your consideration:Eliminate tax deductibility of specified categories of online ads. We need to zero in on the core problem: the attention-based advertisement-driven business model. Subscription business models are much less prone to poisonous manipulation. Taxes create powerful incentives. In Canada, we do not allow tax deductibility for foreign offline advertising. This approach should be generalized so that tax incentives favour subscription models for online services. Ban personalized online advertising for elections. We are dealing with the largest, most centralized form of attention control in human history. Online platforms have mastered behaviour modification and this kind of tool for manipulation is not something we want for sale to the highest bidder during an election. Official elections are a short period of time and the income earned from advertising is trivial to large social media companies. But as the Brexit referendum has demonstrated, the social cost of compromising election integrity is enormous. Implement strict data governance regulations for political parties. This includes at least two things. 1. Apply privacy regulations to political parties regarding access to personally identifiable information. 2. Require transparency of all commercial and technical relationships between political parties and social media companies. The fact that Canadian political parties are still not subject to privacy regulations deeply troubles me. Provide effective whistleblower protections. Some of the most valuable information the public has learned about the abuse of data has come from brave whistleblowers. Make sure whistleblower protection extends to both private sector and governmental activities. Add explicit personal liability alongside corporate responsibility to affect CEO and Board of Director decision-making. To strengthen adherence to existing regulations, consider adding annual signed CEO and Board certifications similar to those required for Sarbanes-Oxley compliance. This 2002 Act was designed to better protect investors by improving the accuracy and reliability of corporate disclosures in the wake of various accounting scandals. As a businessman, I can assure you that when a senior executive or board member must affix their name to a document that has personal liability, this immediately changes behaviour to one of greater prudence and caution. Create a new institution for likeminded nations to address digital cooperation and stability. The data-driven economy’s effects cannot be contained within national borders. New approaches to international coordination and enforcement are critical as policymakers develop new frameworks to preserve competitive markets and democratic systems that evolved over centuries under profoundly different technological conditions. We have arrived at a new Bretton Woods moment. We need new or reformed rules of the road for digitally mediated global commerce – a World Trade Organization 2.0. In the aftermath of the 2008 financial crisis, the Financial Stability Board was created to foster global financial cooperation and stability. A similar global institution, say the ‘Digital Stability Board’, is needed to deal with the challenges posed by digital transformation. The nine countries on this Committee could constitute founding members of such a plurilateral body, which would undoubtedly grow over time. Technology is disrupting governance and if left unchecked could render liberal democracy obsolete. By displacing the print and broadcast media in influencing public opinion, technology is becoming the new Fourth Estate. In our system of checks and balances, this makes technology co-equal with the executive, the legislature, and the judiciary. When this new Fourth Estate declines to appear before this Committee — as Silicon Valley executives are currently doing — it is symbolically asserting this aspirational co-equal status. But it is asserting this status and claiming its privileges without the traditions, disciplines, legitimacy or transparency that checked the power of the traditional Fourth Estate. The work of this International Grand Committee is a vital first step towards redress of this untenable current situation.Thank you. Jim Balsillie, retired co-CEO of Research In Motion and chair of the Centre for International Governance Innovation, testified today at the hearings of the International Grand Committee on Big Data, Privacy and Democracy being held in Ottawa. Politicians from Canada and 10 other countries have gathered to consider how best to protect citizens’ privacy and their democracies in the age of big data and social media. Here are his prepared remarksCommittee Members;It is my pleasure to testify today to such distinguished public leaders. Data governance is the most important public policy issue of our time. It is cross-cutting, with economic, social and security dimensions. It requires both national policy frameworks and international coordination.Social media’s toxicity is not a bug – it’s a feature read more